As gold continues to showcase its strength in times of economic uncertainty, Gold X Mining (TSX-V: GLDX) has been very busy preparing for an extensive drill program at its 100% owned Toroparu gold project.
The project represents one of the largest undeveloped gold deposits in the Americas as the project contains 7.35 million ounces measured and indicated.
Last week, the company commenced its drilling and resource expansion program, consisting of 12,000 meters of drilling designed to define continuity of grade within recently discovered high-grade gold-bearing structures and upgrade and expand the current mineral resource.
We strongly encourage our readers to review the companies infographic here (https://www.goldtelegraph.com/company-spotlight-gold-x-mining/), which will provide you a walk-through of the companies story which showcases:
1. A world-class management team
2. A proven track record of success
3. The company’s world-class asset
4. Location of the asset
5. It’s growth potential
In the months to come, I will be covering this story extensively as the company looks to fast track to production in addition to aggressively expanding its current resource.
I recently caught up with the companies Chief Executive Officer, Paul Matysek, to ask about the current drill program alongside a general overview of the company:
Alex Deluce:
Thank you, Mr. Matysek, for taking the time to provide our readers with an update on Gold X and an introduction to the story.
Can you give our readers a bit of a background on the Toroparu gold project?
Paul Matysek:
Certainly, Alex, and thank you for your interest and support for Gold X. The 100% owned Toroparu Project is an advanced stage, 7.35 million ounces measured and indicated resource based on 675 diamond drill holes totaling 202,250 meters, ranking as one of the largest undeveloped gold deposits in the Americas. To date, the Company has invested more than US$150 million to discover, develop and classify its gold resources and complete engineering studies required to develop an open pit mining operation. Gold X also has a Precious Metals Purchase Agreement (PMPA) in place with Wheaton Precious Metals contributing approximately US$135 million toward project CAPEX based on the Company’s latest technical report.
The Company’s latest technical study estimates 4.52 million ounces of gold production at an average production rate of 188,000 oz per year over a 24-year mine life. Using a US$1,500 gold price, the Life of Mine Free Cash Flow of US$1.77B, 27.68% after-tax IRR, and 2-year payback. The project is highly levered to the gold price as you can see that at US$1,900 gold, Toroparu’s Life of Mine Free Cash Flow increases to US$2.83B, after-tax IRR increases to 40% and payback falls to just 1.5 years.
Feasibility level engineering of the majority of disciplines required to commence construction have been completed and the project is in the final stages of permitting, having received all environmental and fiscal approvals.
Alex Deluce:
The company recently announced a 12,000-metre drill program designed to define continuity of grade within the recently discovered high-grade gold-bearing structures as well as upgrade and expand the current mineral resource at the Toroparu gold project.
Can you touch on the preparation that went into the planning of this program?
Paul Matysek:
The program was initiated by optimization work on the geologic model carried out by SRK Consulting over the summer and more recently by High Power Exploration and Nordmin Engineering, both working at the request of Robert Friedland, our non-executive chairman.
SRK was tasked with updating the geologic model and structural controls on the resources within the open pit resource shells to prepare for the upcoming final feasibility study. As a result of that work several open-pit grade shells were identified along the 2 km extension to the northwest of the Toroparu Main Pit in an area we have named the Toroparu NW Zone (or NW Zone for short). These open pit grade shells contain Inferred Gold Resources and non-classified mineralization that is open along strike (between each pit and extending further along strike to the NW) and at depth.
The drill program design provides for increased density of drilling by infilling the resource shells and step-out drilling between the shells and 600m to the northwest of the historical trend.
In August-September High Power Exploration and Nordmin Engineering were tasked with a review of all geologic data collected within Gold X’s Upper Puruni Concession and more specifically, the Toroparu Gold – Copper-Silver Deposit. This review focused on finding the structural controls of mineralization that occur within every deposit but looked at all mineralization within the existing 3.2 km Toroparu Gold Trend and not only that constrained by the open-pit grade shells. The team focused on the abundant higher-grade assays within the projects database that seemed to occur along structures in cross sections within the Toroparu Main Zone published previously by SRK.
During the review the team identified several discreet east-west oriented thin sub-vertical structures that contained the majority of the 1,811 high grade gold assays above a 3 g/t cutoff grade. These structures can be traced from the depth of the historic drilling to near surface over about 2.5 km of the strike-length of the Toroparu trend and are open further along strike.
A drill program was designed targeting several areas where clusters of high-grade mineralization within these structures can be tested for continuity of grade. If confirmed, additional drilling will be required to expand these areas into underground resource targets. If additional drilling supports the structural model the deposit may contain a mineable thin-veined mesothermal geologic model similar to those controlling mineralization at the Red Lake District in Canada.
Alex Deluce:
With drilling now commenced, is there a rough estimate on how long this program will run?
Paul Matysek:
The drilling commenced on October 6th. We are drilling about 1,000 m per week with two drills on site and have completed 2,900 m of the program so far. At this pace we expect to drill another 6,000 m before camp closes for the holidays the week of Dec 14-18.
Alex Deluce:
Alongside yourself, the company is guided by a world-class leadership team as the group has collectively created C$3.14 billion in shareholder value over the last 13 years.
In April 2020, you joined Gold X as CEO following your success at Lithium X Energy, which sold for $265 million in cash, which is just one of many successful exits you have helped lead throughout your storied career.
What attracted and excited you about the Gold X story before deciding to join the leadership team?
Paul Matysek:
My trademark in the last 2 companies I have sold ultimately involved unlocking shareholder value in poorly managed or mis-understood assets but with significant measured and indicated resources in a rising commodity environment. Sandspring Resources, Gold X’s predecessor company had all the right earmarks of a similar situation with the added benefit of being in a mining friendly nation with well-established democratic institutions, British common law, and one of the largest multi-billion barrel offshore oil endowments discovered in recent history. The government has committed to use its oil riches to develop the country’s infrastructure which is good for Gold X and mining in Guyana.
Furthermore, if we are all expecting a rising gold market, not only does 7.35 Moz M&I open-pit resource provide a ton of optionality, but the potential expansion of the deposit from upgrading the 3 million Inferred resources, prospective gold anomalies with in the claim package, and the district scale exploration potential of the Puruni Shear system that can be traced into the Malawi Goldfields in Venezuela, all provide exceptional future value.
Putting all of this together, Toroparu represents the ideal base to develop one of the last remaining underexplored gold provinces in the world.
Alex Deluce: Thank you very much, Mr. Matysek, for giving our readers a glimpse into the companies exciting story. Hopefully, we can catch up again in the next few months.
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